India to thrash out rating issue with Moody's
Representatives from Moody's Investors Service, the international rating agency, are slated to meet finance ministry officials on December 4 and 5.
"We will strongly ask for better ratings," said an official. He said India had successfully weathered the problems arising out of global economic concerns and growth prospects had started looking up.
The positive outlook on India's growth prospects from Moody's Analytics, the economic research and anlysis arm, this week has also strengthened India's demand for a better grade from international rating agencies.
Economic affairs secretary Arvind Mayaram will lead the ministry officials in the inaugural meeting with the Moody's team on December 4.
The officials will stress there is no risk of any default by India and the capabilities to do well are intact.
The official quoted earlier said, "We have around $300 billion of forex reserves, the current account deficit pressure has eased, the oil price is levelling and there is no run on revenues." He said the Indian situation was not like those in the Euro zone, as the government had the capacity to overcome any problem.
In the two-day meeting, ministry officials will stress, "We have the capabilities for good growth ahead," he added.
Earlier, there was a rating downgrade threat, from investment to the junk category, due to a perceived policy paralysis and pressure on the fiscal deficit.
Moody's Analytics has pegged India's GDP growth for the second quarter of 2012-13 at a little higher than the 5.5 per cent recorded in the first one. It also said growth in the Indian economy was near the bottom of the current cycle and the recent reforms would help reduce key risks but not lift the near-term outlook.
In its report, titled 'India Outlook: Risks Receding', it expected the economy to hit its "potential" growth rate by the second quarter of 2013-14.
GDP data for the second quarter of this year are slated to be released on November 30 and it is expected that growth will be better in the second half of the current financial year.
The economy grew 5.5 per cent in the first quarter, slightly up from 5.3 per cent from the fourth quarter of 2011-12 but substantially below the eight per cent in April-June of 2011-12. The finance ministry is optimistic of keeping the fiscal deficit within 5.3 per cent of GDP in 2012-13, earlier projected to touch six per cent due to pressure on account of disinvestment and spectrum auction revenue shortfall, besides oil subsidies.